KAR buys STRATIM to boost ride-sharing fleet management business

DETROIT (Reuters) - KAR Auction Services Inc (KAR.N), a leading U.S. operator of car auction and salvage services, said on Wednesday it has acquired fleet management software company STRATIM to enter the nascent industry of providing services to ride-sharing and other transportation-as-a-service providers.

Carmel, Indiana-based KAR did not disclose terms for the acquisition of STRATIM, a San Francisco-based startup.

STRATIM is already tracking more than 1 million vehicles in car- or ride-sharing services for around 50 customers in North America, including major automakers, to help them boost usage and keep their vehicle fleets in working order.

Major automakers are racing to roll out alternatives to private car ownership including ride sharing amid the rise of Uber Technologies Inc UBER.UL and Lyft Inc, as well as to develop commercially viable self-driving cars.

The rush is based on the notion that instead of buying cars - the auto industry’s business model for a century - consumers will generate revenue through car usage.

There is also a race to provide lucrative parts and services for those growing fleets of vehicles.

KAR facilitated the sale of more than 5 million used and salvaged vehicles in 2016, large numbers of which were cleaned and serviced prior to sale.

“There’s a lot of money being invested in this space, every (auto) manufacturer is partnering with someone and they’re all going to have their own fleets,” Hallett said. “These fleets will need to be managed, maintained and at some point in time those cars have to be sold.

Last year, the largest U.S. auto retail chain AutoNation Inc (AN.N) announced a multi-year partnership to maintain and repair Waymo’s self-driving car fleet. Waymo also signed an agreement with Avis Budget Group Inc (CAR.O) for the car rental firm to service its fleet.